Chinese investment no threat to national security: MOEA

The MOEA noted yesterday that comprehensive regulations and complementary mechanisms have been put in place to monitor Chinese investments in Taiwan.

The government will also regularly make necessary adjustments, depending on the effects on Taiwan's economy and industry.

The opposition Democratic Progressive Party (DPP)

has criticized that the policy of allowing Chinese capital investments in Taiwan will cause a security breach and harm Taiwan's sovereignty by Chinese involvements in local airport and seaport projects.

In its response, the MOEA explained that Chinese investments will be allowed in only non-restricted zones of commercial ports, such as warehouses, transit hotels, international convention centers, and parking lots. Chinese capital will not be permitted in restricted areas, including airports, runways or the hangars for the repair and maintenance of airplanes, it said.

The MOEA said it believes the stringent regulations requiring that foreign investment (including capital from China) can account for no more than a 50-percent stake of the shares in Taiwanese companies will also help prevent Chinese investors from leveraging local businesses.

The rules also prohibit funds from Chinese military units or from Chinese companies related to military purposes from being invested in Taiwan.

Chinese funds are not allowed to enter the utilities or monopoly industries such as water, electricity and fuel suppliers, or business sectors that play key roles in domestic economic development, financial stability, and national security, according to the new regulations.

The ministry is also strictly reviewing applications from China.

An application submitted by China Southern Airlines July 1 to open a branch in Taiwan was already turned down after it failed to complete due process owing to a lack of the required documents.

Fan Liang-tong, executive secretary of the MOEA's Investment Commission, said that his agency will not let up the scrutiny work, although it is stepping up the speed to issue approvals for investment plans put forward by Chinese investors.

He acknowledged that many Chinese delegations have visited Taiwan in recent months in search of investment and business opportunities. During the January-May period this year, the number of Chinese people visiting Taiwan for business purposes averaged more than 7,000 each month, double the previous year's level, according to statistics from the commission.

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